Which of the following was NOT an outcome of the Underwood Tariff Act?

• A. A significant reduction in tariff rates on imported goods
• B. The introduction of a federal income tax to compensate for lost tariff revenue
• C. An increase in protection for domestic industries through higher tariffs
• D. Greater competition from foreign producers in the U.S. market

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the historical context of the Underwood Tariff Act, which was enacted in 1913 to reduce tariff rates and promote free trade.
2. Step 2: Recognize that the Act significantly lowered tariffs on many imported goods, aiming to reduce protectionism and encourage competition.
3. Step 3: Note that to offset the revenue loss from lower tariffs, the Act introduced a federal income tax, authorized by the 16th Amendment.
4. Step 4: Identify that the Act did not increase protection for domestic industries; instead, it reduced tariffs, which means it did not raise tariffs to protect domestic producers.
5. Step 5: Conclude that the outcomes of the Act included lower tariffs, introduction of income tax, and increased foreign competition, but not higher tariffs or increased protectionism.